Market Synchronization

February 27, 2013

In many ways the business model of a pizzeria is very simple. It currently operates in a market of about 2-3 thousand, low to medium income. The population is approximately 93% Caucasian and 7% African-American and Hispanic. We service local industrial business, small residential housing and a Job Corps facility. One direct and one in-direct competitor exist; and with such a small, flexible business in a minimal market, synchronization should be fairly easy.

Here are two examples of surprising trends which brought us more in tune with our market.

Less is More: We began delivery breakfast sandwiches to local businesses. Usually ten would be made and taken to five locations surrounding our own. Flyers showing our weekly specials would be distributed and infrequently lunch orders taken. The number sold was recorded daily and varied widely. Over time the number produced and sold proved unpredictable; stopping delivery all together seemed logical. We then introduced a secondary product. This increased sales by 30% almost immediately and seemed to revive the channel. However, in a few weeks the trend returned to it’s usual variable pattern. Production costs were increasing and information research yielded little feedback. So we stopped. And the most surprising thing happened – visitors. Local workers would leave their sites and stop by the business at their break time. For the past four months we have sold the same number or more sandwiches every week day. Costs were reduced in labor and production, stabilization becoming the norm.

Once in a While: On occasion the store needs to be closed for a few hours to run errands and attend appointments. A gap of two hours a day is usual for the business until recently several customers began showing up. Additional revenue is always welcome, except when I need to take my dog to the vet or get my teeth cleaned. The thought was to put up a sign and leave a clever message on the machine about observing a siesta. Instead we called each customer to explain that we would be closed during those hours and would they like to order early. We would deliver at no cost to them. The customers were delighted and ordered more than usual, covering the delivery fee. Increasing market share through personal attention and customization brought positive change from the usual response to operating opportunity.

These are just a few examples of how changing the handling of the market and thinking outside the box can yield unexpected results.